Anaesthesiologist here.
When you breathe normally, your body naturally saturates the air with water vapour, either while passing through the nose, mouth and throat, or while inside the lungs.
It does it so well that in fact we generally assume the room air to have become fully saturated with water vapour by the time it is inside the lung – we have an equation called alveolar gas equation which is used to calculate the proportion of various gases that end up at your alveoli (the millions of small gas exchange units inside the lung), in this equation we actually deduct the saturated water vapour pressure before we do any calculation for other gases due to this effect.
https://en.m.wikipedia.org/wiki/Alveolar_gas_equation
By the way: do you realise that “steam” is actually liquid water like fog, cloud etc; actual water vapour which is the gaseous state of H2O is invisible?
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