The hot water is breaking down the oils in your skin. Dry skin isn’t just about water, it’s about oil, because oils are what keep the water in your skin from easily evaporating into the environment. That’s why lotions help: they are just artificial, nice-smelling oils you use to replace the natural ones after washing.
Your skin has sebum glands that produce an oily substance which moisturizes the skin. When you use hot water (and moreso soap) all the sebum is washed away resulting in dry skin. Just getting your skin wet doesn’t make it moist, oils are what moisten skin by allowing the skin it hold moisture itself.
A simple experiment can help here. Get two dishes and rub some butter on them. Then try to clean them with soap and water. On one dish use cold water and on the other use hot water. The hot water dish should be significantly easier to clean than the cold water dish.
As the other commentators have stated your skin is moisturized by the oils that you produce. The hot water will wash significantly more away leaving your skin drier.
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