Problems with source identification in dbt-core

I’m attempting to run a project with dbt-core that was initially set up in dbt Cloud. This is necessary because the dbt Cloud CLI is extremely slow and unresponsive due to the project’s large size. As a first step, I successfully configured my profiles.yml and established a connection with Snowflake. Running dbt debug confirmed that the connection is successful. However, I’m encountering issues when trying to run or compile models.

Compilation Error

The error message I receive is:

Could not render xxxxxxxxxx. 'source' is undefined

Current Source Structure

Here is the structure of my source files:

models/
  └── sources/
      └── source1/
          └── fruits.yml

Content of fruits.yml

sources:
  - name: product
    database: staging
    schema: stage_one
    tables:
      - name: fruits

Configuration in dbt_project.yml

The dbt_project.yml file has the models path defined. I’m unsure if I’ve missed anything else. How can I configure dbt-core to correctly read the sources? Any help would be appreciated.