How does a hot-air balloon rise? Fire up the burner and the temperature of the air captured within the balloon increased. The molecules of the air take on the thermal energy and become more excited. The excited molecules create more space between them. As a result, the air expands as its temperature increases. Thus, one pound of air at 80 degrees Fahrenheit is a larger volume than one pound of air at 60F, which is a larger volume than one pound of air at 40F.
Moreover, air always has some amount of moisture in it. Proportionately, it is a very small amount of moisture relative to the overall air mass, but it is in there.