While this passage tells us that we are not saved by our works, and therefore we have no basis for boasting, it also says we are save unto good works. God has ordained that we should walk according to good works. We are created for that very purpose. Now faith is the substance of things hoped for, the evidence of things not seen. This verse gives us God's definition for faith.
Faith is first of all substance.
That which stands under the things we, as Christians, hope for is our belief in the promises found in God's Word. Secondly, faith is evidence. You cannot see my belief except as it is worked out in my life. If someone says he has faith and there is no evidence of that faith in his life you can be sure that it is a false faith. Salvation changes people.