What does 1 Peter 2:10 mean?

In verse 10, Peter references Hosea 2:23. This Old Testament prophet was a living symbol of God's willingness to forgive sin, and to redeem mankind. Even though Hosea's wife was constantly unfaithful, he forgave her and rescued her from a life of slavery. Like Israel, all Christians together—the church—have been changed. We have a before and an after. Before, we were not a people. We belonged to ourselves and served only our own desires. But in Christ, we have become God's people. We have belonging. We have purpose. We have a shared destiny with Him in eternity.

Before, we had not received mercy. We would have received the full penalty for our sinful choices. But through faith in Christ, we have received mercy. Our status has been permanently changed. Notice that both statements are in the present tense. We are not seeking and hoping to become God's people and receive mercy. In Christ, we are God's people. We have received mercy. The transaction is complete.