Rural has a special place in my heart because I come from small town Wyoming. Not much for cities in the entire state, so the idea of paranormal//fantasy elements in the country sounds like a win in my book. Werecows anyone? lol
(Image Source: http://actionflickchick.com/superaction/the-wolfman-2010/)
Okay. Maybe not werecows but the Rocky Mountains aren't that far away and wolves aren't uncommon in those mountains. But first let's consider the definition.
Rural Fantasy - a subset of fantasy where the story is located in a rural area, often modern times but doesn't have to be, that has a fantasy/paranormal element(s). So, like urban fantasy but not urban.
Some wonder if Rural Fantasy can be as interesting because there are less people, towns are a lot smaller than cities so less places to hide, but rural has its own problems that don't exist as much in the Urban setting. Rural fantasy allows for supernatural elements that have deeper connections to nature and nature can be an important part of the plot.
Some books thanks to Mark C Newton:
Richard Adams - Watership Down
Neil Gaiman - Stardust
John Connolly - The Book of Lost Things
Barbara Hambly - Dragonsbane
Terri Windling - The Wood Wife
Now, how about Suburban Fantasy? Don't want to leave out the people that may not live in rural but don't quite qualify as the city/urban.
Suburban Fantasy - fantasy subset where the focus location is in a suburban area and has a fantasy/supernatural aspect. The suburbs have their own special flair. While the grittiness of the urban doesn't exist there, instead there is a different element. Working with "the other" would work very well with a suburban setting even more so than the city. Imagine what a wizard or vampire would have to do to make it in a suburban setting. Could make for an interesting story.
Books (harder to find but I did search a few places:
Julie Kenner - Carpe Demon (The Secret Life of a Demon-hunting Soccer Mom)
Freda Warrington - Elfland
Katica Locke - The Vampire Next Door
Esther Friesner - Strip Mauled