In Romans 1:17, Paul’s phrasing can be challenging when relying upon the English translations, leading to several interpretations. However, the original Greek does not present this type of issue because it is clear in what Paul is expressing.
For a quality of the righteousness of God is revealed out from faith into faith, just as it is written, “The just will live out from faith.”
Faith is the substance of that which is hoped for, the evidence of accomplished deeds not seen (Hebrews 11:1).
Those of the circumcision are justified out from faith and the uncircumcised into faith. The Jewish people were already a people of faith, having lived under the covenant promises given to Abraham and through the Law of Moses. They believed in Yahweh, and through the Torah, they anticipated the coming of the Messiah. This kind of faith was focused on the promises yet to be fulfilled, particularly the hope for redemption. For them, the gospel reveals a righteousness that comes "out from faith”, not by law. For they were seeking their own righteousness. The Gentiles, on the other hand, were alienated from God. As Paul writes in Ephesians 2:12 (NKJV), they were “strangers from the covenants of promise, having no hope and without God in the world.” The Gentiles didn’t have the background of living under God's covenant, so for them, faith is something new that they are brought "into." Through the gospel, they come "into faith" in Christ for the first time.
Paul states in Romans 1:17 that through the gospel of Christ, God’s righteousness is manifested first to the Jews, who are transitioning out from their existing faith — having already received a promise from God — into a faith based upon the death of Christ for sins, His burial, and resurrection three days later. Then it is revealed to the Gentiles, who were alienated from the life of God and had no prior promise. The Gentiles are brought into a faith based on God's promise of salvation through Christ's death, burial, and resurrection.